News

High hopes for £1bn Virgin float

SHARES in Virgin Mobile are expected to perform strongly when the company floats later this month, writes Alicia Wyllie.

The mobile-phone operator, part of Sir Richard Branson’s Virgin Group, has announced plans to list a minority stake in the business of up to 40%.

Virgin Mobile has only 7% of the mobile market, but is growing fast. Last year it attracted 1m customers, bringing the total to almost 4m.

Stockbrokers think the shares could trade at a premium of 10% to 15%, even though telecom stocks have lagged the market over the past three months.

Justin Urquhart Stewart of Seven Investment Management said: “Virgin Mobile buys capacity from rival companies rather than running its own network, which keeps costs down. It is an attractive business but it is in a mature market so it will have to rely on its ability to win customers from other networks.”